POLICY ORGANS -SPECIAL BULLETIN

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AU HQ: Venue of the 18th COMESA Summit

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The need to embrace the digital technology in the implementation of regional

integration programmes was in focus as the 37th COMESA Council of Ministers met in Lusaka, Zambia, 3 - 4 November 2017.

Speakers that included the Vice President of Zambia Her Honour Mrs Inonge Wina acknowledged that globally, countries are increasingly trading with each other through electronic platforms. Thus, COMESA States had no option but to embrace the ICT in all regional integration programmes.

Cognizant of the shifting trends, COMESA has adopted the theme; ‘Comesa – Towards Digital Economic Integration,’ to entrench information Communication Technologies in trade facilitation programmes. Already a range of trade facilitation applications have been developed.

They include the COMESA Virtual Trade Facilitation System, an online platform for trade facilitation instruments and a regional customs bond; Regional Customs Guarantee Scheme. An electronic Certificate of Origin (of goods for export) and a digital Free Trade Area Application that will incorporate e-Commerce, e-Legislation and e-Logistics are also being developed.

The Secretary General of COMESA Sindiso Ngwenya told the Ministers that the organization has developed a new Mobile Application for use by cross-border traders in the region.

“Once implemented the Mobile App

L-R: Vice President of Zambia Her Honour Mrs Inonge Wina, Secretary General of COMESA Sindiso Ngwenya and Hon Chabani Nourdine

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COMESA POLICY ORGANSDigital Economic Integration

shall assist the cross-border traders to get information on the various trade related activities in the region as well as use the App to make payments,” he said. “Gone are the days when we have had documents being presented physically at the border posts because with the digital economy, you can do that from the country of export irrespective of where it is,” Ngwenya added. “The long queues that we see at the borders are

needless.”

He said millions of dollars are paid to banks for merely signing letters of credit because businessmen and women do not trust one another, a situation he said will be remedied as the business community embrace the digital economy.

In her official opening address to the Council of Ministers’ meeting, the Vice President appreciated that 15 out of the 19 COMESA Member States are now trading with each other under the Free Trade Area Agreement.She urged Member States to prioritize industrialization to ensure that value chains within and across the region are developed. She noted that the composition of intra COMESA trade was dominated by primary commodities which, devoid of value addition, cannot create wealth.

Once implemented the Mobile App shall assist the cross-border traders to get information on the various trade related activities in the region as well as use the App to make payments,” Ngwenya

October - November 2017

in Focus as Council Meets

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The chair of the COMESA Council of Ministers Hon. Nourdine Chabani, who is also the Minister for Trade and Consumption of Madagascar, appealed to Member States to provide resources through their assessed contributions to the Secretariat and

Fifteen out of the 19 COMESA Member States as now fully in the regional Free

Trade Area with only four countries remaining. The Council of Minister meeting however noted the steady progress that the remaining countries are making towards full participation

Except for Swaziland which is exempted owing to its membership to the Southern Africa Customs Union (SACU), the others; the Democratic Republic of Congo, Ethiopia and Eritrea are all at various stages to eventually become full members of the FTA.

The DR Congo is expected to achieve full participation by 2018 by reducing tariffs for COMESA originating products by 40%, 30% and 30% each year since it issued a gazette notice in December 2015.

Eritrea is already offering 80% tariff preference to COMESA originating products. Recently, a study on the implications for joining the COMESA FTA on the Eritrean economy had been carried out and validated on 16 June 2017. This study will assist Eritrea in arriving at a decision regarding participation in the COMESA FTA.

institutions, to enable integration to succeed.

The Secretary General of the African, Caribbean and Pacific Group of States Dr. Patrick Gomes addressed the Ministers. He reiterated the importance of relations

between ACP and Africa and in this regard noting the contribution of COMESA to the African Continental and Tripartite integration programmes. He called for cooperation in formulating the Post Cotonou 2020 position for engaging the European Union.

As a first step toward joining the FTA, Ethiopia reduced tariffs for COMESA originating products by 10% in 1989. In 2014, a study on the competitiveness of Ethiopian firms in participating the COMESA FTA was undertaken. The study recommended a phase down of products on which tariffs could be reduced to zero by 2019. The country is consulting on effecting further reductions.

During its meeting, the Council urged non-FTA Member States to expedite their accession processes to the COMESA FTA to enhance intra-regional trade and create opportunities for citizens of the region.

The COMESA FTA was launched in October 2000 to provide duty free and quota free market access to Member States on COMESA originating products. The regional bloc has criteria for the Rules of Origin to ensure that goods that have undergone processing or are wholly produced within the region get preferential tariff treatment when crossing the border.

COMESA countries that are fully participating in the Free Trade Area are Burundi, Comoros, Djibouti, Egypt, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda Zambia and Zimbabwe.

Full FTA in Sight as Remaining States make Steady Progress to Join

Council of Ministers and head of delegations

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Ministers responsible for trade in COMESA States have resolved to increase support

to technology to raise product quality. Their decision was informed by a report presented to them showing that on average, the level of technological sophistication of exported products from the COMESA region was not only low, but has also declined.

The report noted that a narrow range of product sophistication across the member States has persisted. This notwithstanding that primary and resource based products in the COMESA region have continued to account for the largest share in the export basket excluding Mauritius which currently stands at 43% of exports.

“Put together, the products accounted for more than 60% of the export basket in all Member States, up from 50% in 2014,” the report said. “Rwanda, Malawi and Zimbabwe accounted for more than 80% of the exports while Burundi, DRC, Comoros, Zambia, Seychelles, Ethiopia and Djibouti they accounted for more than 90% of total exports.”

The Council noted that inventing and increasing the use of machinery, technology and automated processes in productive undertakings was critical for COMESA States to produce, boost and sustain long term export growth of high value-added products.

Hence, the Council agreed to foster effective

education and skills especially science, technology, engineering and math skills in the region.

“Increasing support to digital technology

The Council of Ministers have resolved to undertake structural transformation

geared towards economic diversification from commodity exports dependence into higher value-added services and goods, while continuing to raise agriculture’s share in the economies. The move is intended to address declining trends in the COMESA’s global and intra COMESA trade.

COMESA’s global total exports recorded a decline of 7% in 2016 at $71 billion from $76 billion in 2015. The global imports also declined by 8% from $179 billion in 2015 to $165 billion in 2016. The decline in both exports and imports was largely due to declines in commodity prices including fuel, ores and metals.

According to a report prepared for the 37th Council of Ministers, the global COMESA trade had the highest levels of trade deficit of $97 billion, $104 billion and $94 billion in 2014, 2015 and 2016 recorded in the past years years respectively.

Innovation and Technology to Address Product Quality

infrastructure and mainstreaming a culture of productivity at all levels of production processes will also greatly help develop innovation, technology and trade for the 19-member bloc,” said the Minister in their final report.

For Intra-COMESA trade, exports declined by 17% from $9.6billion in 2015 to $8.0 billion in 2016.

The Ministers agreed to accelerate integration by implementing the Tripartite Free Trade Area arrangement to boost intra-regional trade in manufactured goods. This is in addition to developing country specific action plans to ensure implementation of decisions on macroeconomic issues.

The Council also discussed how to address deficits in infrastructure, technology and human capital by mobilizing domestic resources innovatively by improving management of the public sector, combating tax evasion and illicit financial flows and developing sovereign wealth funds.

Member States pledged to continuously improve political and economic governance and economic management to enhance productivity in sectors where a member country has comparative advantage.

Structural Transformation to Raise Regional Trade Volumes

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Council in Session

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The COMESA Statistics Strategy 2017-2020 has been adopted. In its 37th meeting,

the Council of Ministers noted that the new strategy will consolidate the gains made on harmonization of statistics in the COMESA region and strengthen strategic partnerships to support the Medium Term Strategic Plan 2016-2020.

The thrust of the new strategy is to strengthen the use of technology in enhancing production, transmission and dissemination of regional statistics, enhancement of technical skills, competencies, literacy and structures.

“The Strategy recognizes the role of the COMESA Statistical System in the global Statistical Architecture and places significant emphasis in developing recognizable synergies with global partners.,” the Ministers noted in their report.

Under the leadership of the COMESA Committee on Statistical Matters, the Strategy will provide a basis for monitoring and review, resource mobilization and statistical advocacy.

“This Strategy will enhance the role of statistics in evidence-based regional a result that is consonant with the COMESA Treaty provisions for development of a relevant regional statistical system,” the Council noted.

COMESA Statistics Strategy

The COMESA Treaty states that Member States undertake to cooperate in the field of statistics to create an enabling environment for the regular flow of up-to-date reliable, harmonized and comparable statistical data on various sectors of economic activity, required for an efficient implementation of the objectives of the common market.

COMESA Secretariat is working closely with Member States to build their capacity through national workshops. It is also working with the World Trade Organization to share data on trade in services.

The Committee further noted that the Secretariat was planning to put in place an Information Hub, to underpin the digitisation of COMESA integration programs and to assist leap-frog the adoption of modern technologies and information systems in the region.

“This Strategy will enhance the role of statistics in evidence-based regional a result that is consonant with the COMESA Treaty provisions for development of a relevant regional statistical system,” the Council noted.

2017-2020 Adopted

Prohibitive costs of transportation in the COMESA region is the main handicap towards

the successful implementation of the regional Free Trade Area. This has compelled trade experts and leaders in the regional bloc to begin thinking about the establishment of a shipping line.

During their annual meeting in Lusaka, the COMESA Council of Ministers approved a proposal to establish a shipping line that would serve both inland and coastal countries. This would be done through regional institutions and Member States.

In approving this intervention, the Ministers

COMESA has welcomed the lifting of economic sanctions against the government of Sudan by the United States

of America. The USA lifted long standing sanctions against Sudan on 6 October 20017. Secretary General Sindiso Ngwenya said the move was not only good for Sudan but the region a whole.

“I would like to congratulate His Excellency President Omar Al Bashir for this development. It was not an easy road. It took quiet a lot of discussions over a long period of time,” he said. “We now expect Sudan’s economy to get back on its feet.”

Speaking at the 37th Meeting of the Intergovernmental Committee, the Secretary General expressed optimism that Sudan could now meet its financial obligations and implement various developmental programmes.

noted that addressing the high transportation costs would resolve the challenges affecting the performance of the Free Trade Area.

An assessment conducted earlier by the COMESA Secretariat on the performance of the FTA indicated that the average bilateral intra-COMESA trade cost stands at 310 percent of the value of trade. This is much higher than the bilateral intra-regional costs of trade for East Asia and Pacific; Europe and Central Asia; Latin America and the Caribbean; Middle East and North Africa; South Asia and Sub-Saharan Africa.The main challenges include: the high trade cost

COMESA Mulls a Shipping Line to Address High Transport Costs

that could be attributed to both direct and indirect costs associated with; fulfilling regulatory import and export requirements; costs resulting from differences in currencies, geographical distance, domestic and international shipping and logistics costs associated with imports and exports. Other proposed interventions identified during the assessment was the need to establish Public-Private Partnerships especially in the development of transport and logistics infrastructure.

“For COMESA Member States to realize the highest levels of innovation-based growth in exports and produce high-value added products for long-term growth there is need to redesign policies geared toward facilitating adoption of existing technology, intellectual property rights and vocational education that would bolster innovation capacity,” said the assessment report.

The assessment indicated that the low levels of trade complementarity among Member States could be addressed through establishment of regional production networks. Thus Member States needed to eliminate and avoid imposition of Non-Tariff Barriers and relax Rules of Origin to enhance intra-COMESA trade.

In its decision, the Council directed the Secretariat to expeditiously undertake detailed analysis on the Rules of Origin, trade costs, transportation costs and other elements affecting intra-COMESA trade.

COMESA Welcomes Lifting of Sanctions Against Sudan

Sudan delegates at the Council

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Funding from COMESA cooperating partners may increase for 2018 if the programming

processes of the 11th European Development Fund (EDF) funds are completed early and grant agreements are signed. This will cushion the organization from a possible decline in funding as other cooperating partners grants come to an end.

Speaking during the opening of the 37th Administrative and Budget Committee Matters meeting, 26 – 28 October 2017, the Secretary General Sindiso Ngwenya said the proposed 2018 annual budget for the COMESA Secretariat and its agencies would decline by US$10 million dollars.

“The annual budget will decrease from USD42 million in 2017 to USD32 million for 2018. This translates into a 30% reduction,” Mr. Ngwenya said. Member States are expected to contribute $16.7 million while cooperating partners are expected to provide $15.6 millionThe Secretary General urged Member States to put up deliberate measures to increase the

The 37th meeting of the COMESA Intergovernmental Committee took place in Lusaka, between 30 October – 1 November 2017.

The IC brought together Permanent /Principal Secretaries to discuss and review implementation of regional integration programmes and activities and make recommendations to the Council of Ministers for decision making.

Zambia’s Minister of Commerce, Trade and Industry Hon Margaret Mwanakatwe, officially opened the meeting. In her speech, she said the implementation of regional commitments requires full-scale participation of all Member States in COMESA.

“The low level of transposition of regional instruments at Member States level has negatively affected the implementation of various programme,” she said. “There is need for

proportion of their financial contribution to the budget.

He noted: “At some point, our cooperating partners will naturally expect COMESA Member States to assume a greater share of funding of the COMESA work programme.”

European Fund to Bolster COMESA BudgetTo ensure the desired levels of integration and cooperation is achieved, the Secretary General called for the speedy implementation of agreed COMESA instruments by Member States. He noted that the current levels of production and infrastructure development were affecting job creation and intra-COMESA trade.

“COMESA may not achieve the desired development milestones in 2020 at this low implementation level of COMESA instruments,” he said.

The Administrative and Budgetary Committee supports and guides the Secretariat in administrative, financial, human resources and audit matters.

Participants comprise technical officers from governments of the 19 COMESA Member States. Their report was presented to the 37th meeting of the COMESA Intergovernmental Committee and eventually to the Council of Ministers for decision making.

Member States to implement agreed Summit Decisions.”

Minister Mwanakatwe appealed to Member States to consider appropriate funding of the COMESA budget to sustain the gains achieved in regional integration.

She said: “Over the years, the resource envelope has continued to shrink. This has resulted in some of COMESA’s flagship programmes being discontinued and more are likely to follow.”

Full-Scale Participation is Needed for MS to Implement Regional Commitments

The low level of transposition of regional

instruments at Member States level has negatively

affected the implementation of various programme,” Hon.

Mwanakatwe

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COMESA Secretariat has completed the design of the Digital Free Trade Area and

its action plan and the development of the Electronic Certificate of Origin (eCO) and its draft regulations. The certificate is now ready for piloting in 15 Member States that are willing and ready to participate.

These include: Burundi, Democratic Republic of Congo, Egypt, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Sudan, Seychelles, Uganda, Swaziland, Zambia and Zimbabwe.

Ministers attending the recent Ministerial Council meeting in Lusaka, Zambia, 3 - 4 November 2017 welcomed the progress made on the design of the digital FTA and the electronic trade facilitation tools noting that they have the potential to transform regional

Representatives of key COMESA Development partners were part of the

guests invited to address the COMESA Policy Organs meetings. The European Union, which is the leading contributor to regional integration programmes in COMESA was represented by the Head of Delegation to Zambia and Special Representative to COMESA Ambassador Alessandro Mariani.

In his statement, Ambassador Mariani said the EU firmly believes in the great benefits of regional economic integration for creating bigger markets, attracting investments, facilitating trade flows and reducing production costs and prices for consumers.

“This is evidenced by the allocation of 1.3 billion Euros to the Eastern, Southern and Indian Ocean (EA-SA-IO) regions for economic integration, peace and security and management of natural resources covering the period 2014-2020,” he said.

This support is entirely in the form of grants and compliments what EU provides directly at country level through national envelopes in many different sectors including infrastructure, trade, private

Digital Free Trade Area Instruments Ready for Trials in MStrade.

The Council recommended for a phased approach for rolling out the instruments for the Digital FTA. This will begin with the instruments that are ready and Member States that are willing to participate within this year. Other segments will be finalized concurrently while addressing constraints Member States may have.

In 2014, the Council decided that Member States that were ready to accept and use the Electronic Certificate of Origin should do so by 31 July 2014. The Council had further urged Member States whose legal systems did not provide for e-COs to enact enabling laws as soon as possible with the view to replace the manual certificates of origin with the electronic

Development Partners address to Policy Organs

sector development, good governance, fight against climate change among others. In his statement, the USAID Deputy Mission Director Mr. Patrick Wilson described the longstanding partnership between COMESA and USAID as solid.

“During our long relationship with COMESA, we’ve collaborated on many initiatives such as in the development of regional seed catalogues, common plant and animal health standards, and addressing other barriers to improve the enabling

environment for regional trade.”Mr. Wilson stressed the importance of Africa trading with itself for sustainable economic growth.

Other speakers included Prof. Victor Harison, AUC Commissioner for Economic Affairs African Union), Mr. Siaka Coulibaly, Senior Programme Officer, African Capacity Building Foundation (ACBF), Ms. Annie Lane, Officer in Charge, Programmes Office at the International Organization for Migration.Tunisia, which is expected to join COMESA next year attended the Council meeting as an observer. It was represented by Mr Hichem Ben Ahmed, the Secretary of State in charge of External Trade in the Ministry of Commerce.

Ambassador Mariani

“During our long relationship with COMESA, we’ve

collaborated on many initiatives such as regional seed catalogues, common plant and animal health

standards, and addressing other barriers to improve the

enabling environment for regional trade.”

certificates in a bid to speed up the process of certification as well as facilitate trade in real time.

In line with the latest Council decision, the Secretariat will undertake capacity building programmes for participating Member States in the first half of 2018 through a regional workshop and national workshops. This will bring on board the public and private sector to provide input and ownership of the systems, and ensure that the system integrates the small and medium enterprises.

Council also directed the Secretariat to undertake a gap analysis of which instruments Member States have and their preparedness to implement the Digital FTA instruments.

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The winners for the 2017, COMESA Media Awards have been named. They are Mr.

Peterson Tumwebaze, New Times of Rwanda and Ms. Herrsha Lutchman of The Bizweek, Mauritius. The two were announced during the 37th COMESA Council of Ministers meeting that took place in Lusaka Zambia, 3 - 4 November 2017.

Subsequently, the Council of Ministers approved various rewards to the two journalists including full sponsorship to attend the next COMESA Heads of State Summit, a cash reward, a trophy and a certificate. The journalist will be recognized and awarded during the next Summit expected early next year.

Mr Tumwebaze wrote about the COMESA local sourcing project, whose objective is to promote business linkages between local producers and buyers in the region. The programme encourages corporate firms to buy most of their supplies locally. The project was piloted by the COMESA Business Council in six member States.Ms Herrsha’ s article addressed the political challenges that face regional trade despite the existence of frameworks such as the Tripartite

Free Trade Area.

Entries for the awards were those published in 2016. Entries were received from 11 out of the 19 COMESA Members States including Burundi, D R Congo, Ethiopia, Kenya, Malawi, Mauritius, Seychelles, Rwanda, Uganda, Zambia and Zimbabwe.

The objective of the COMESA Media Awards is to promote reporting of COMESA regional integration activities and recognize journalists

COMESA Media Award Winners for 2017 Named

whose works contribute to the integration agenda. The awards are open to journalists from the 19 COMESA Member States.

Meanwhile, COMESA Secretariat has issued a Call for Submission of Entries to the 2018 COMESA Media Awards. Eligible entries are those published between 1 January 2017 and 31 December 2017. Details of the Call are available on www.comesa.int

Ms Herrsha Lutchman, winner of the 2017 COMESA Media Awards interviewing the Secretary General Sindiso Ngwenya during the signing of the Tripartite Free Trade Agreement by the Government of Mauritius in October 2017.

Policy Organs Pictorial